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tv   Bloomberg Daybreak Americas  Bloomberg  April 30, 2019 7:00am-9:00am EDT

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-- breakable china. pmi's close to even. earnings not so bad, but alphabet disappoints. we talk with 3m's ceo about what went wrong. and is a cut on the table? fomc meets today. welcome to "bloomberg daybreak." i'm david westin, here with lisa abramowicz. boy, do we have earnings. lisa: they are flooding in. we are getting conocophillips. first quarter earnings-per-share beat the highest estimate. that is a beat, joining the likes of merck and pfizer, also beating this morning. david: general electric had a very big beat. about on for like charter communications. revenue is $11.2 billion.
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capex is a little later than expected. i do not see the eps yet. lisa: what people were looking for was an increase in free cash flow and less expending. that seems to be confirming the expectation. david: thus far, the big market mover looks to be ge. it has been beaten up so badly. ,hey beat on earnings-per-share 23.7 billion dollars in revenue, but the real news was free cash flow. everybody said focus on free cash flow. the estimate consensus was 2.9 bit dollars in the hole. --y were -- was 2.1 was $2.9 billion in the hole. $1.2 billion in the hole. it is less money that they expected to lose.
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meanwhile, a lot of farmer out. -- a lot of pharma out. lisa: eli lilly did miss slightly, and shares are being punished as a result. are updid beat, and they 1.5%. merck boosted their full-year forecast. if they boost full-year earnings forecast, you will get rewarded. coming up later this hour, we will talk to eli lilly's chairman and ceo about those earnings. lisa: let's get a check on the broader markets. a little bit of a softer file ahead of the u.s. open. of course, the nasdaq being dragged down by alphabet, googles parent company, down sharply. crude gaining after some news out of venezuela about a by guaido.up
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the opposition leader. david: marty schenker is with us now. as with these things, the first reports are always wrong. marty: there is definitely an attempt by guaido and his allies to foment an uprising. it is in these early moments of a situation like this, it is very unclear who has control of the situation. surrounded by military offers, and the military is key to maduro staying in power. if the military ends up moving towards guaido, it could be the end for maduro. lisa: clearly there is concern this is going to foment further disruption in oil supply. what is the chance of a full out
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military altercation there? marty: the statements from guaido about a peaceful has takenion, maduro to detain people here and there, but guaido is obviously free. if he moves to seize guaido, if there is some physical harm, you could see a very serious escalation of the situation. that is why it is so fluid at the moment. david: which means we will have to watch it very closely as it develops. now we will go to bloomberg first take for all our top stories. we were joined -- we are joined sarah ponczek. we had pmi numbers come out. the one that i am really focused on is the yellow line. it is not quite 250, but it is darn close. expansionary territory, but we are still seeing
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softening. people talking about the green shoots in china. this shows once again it is not so certain. we still need more evidence. heading into trade talks today, it really highlights that both china and the u.s. do need to come to a deal, especially when you look at the chinese economy. it is not certain we are seeing turnaround. china is not going to stimulate anymore because they don't need it, but maybe not. lisa: there seems to be a seesaw of who has the upper hand in these trade negotiations. we have seen the export numbers hit substantially out of china. out of this backdrop affect trade negotiations? marty: i think you can over interpret what one set of data means for trade negotiations. both sides are looking for long-term benefits that a trade deal would provide. short-term, though, donald trump wants to move on on this issue. he is now in 2020 mode. china wants to be able to manage
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their economy and not have this as a backdrop. there's incentive on both sides to get this done. lisa: meanwhile, we are looking at the companies focused in the united states as the biggest winners, ones that depend on china that are missing. miss on saleseral come about the percent beating .2% wondering, what are some of the takeaways from this earnings season as we mark our halfway point? sarah: the large takeaway is that it is not as bad as feared. everyone was worried about a profit recession. it looks like we were going to get an earnings growth decline of 4%. now that is closer to 1.7%. also, today is really reminiscent of what we have been
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seeing the entire earnings season. if you look since j.p. morgan kicked off the numbers, we are less than 2% higher. we really haven't seen all that movement because the market is actually differentiating. if you look at ge, merck, pfizer moving to the upside, but google offsetting that. we saw that last week with xilinx and 3m to the downside, and facebook and microsoft offsetting that. inhave seen correlations past earnings seasons. 3m's ceo will speak to in an exclusive interview later this hour. lisa: that may exist to our third topic. one people are relying -- one thing that is certain is people are relying on rates staying low. meeting.al reserve is i have to wonder how much the fed's view is being colored by
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political pressure from president trump. certainly a big ruckus right now going on over the nominee to the whoboard, stephen moore, had some unsavory comments about women come out. marty: he has some issues with senators with lukewarm support. donald trump has made clear he think that interest rates should stay low. he think's quantitative easing should be brought back. very few people think that. the economy is chugging along, and the fed does not want to be seen as partisan, but it is very difficult to block out what is coming from the white house day after day, even though they maintain their independence. david: if it has an influence, it is not the one the markets will dislike. sarah: no, it is not. david: upside, not downside. sarah: the markets are very much looking for a cut.
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we can't say that is because of pressure coming out of d.c. probably more so because of inflation. we've heard the likes of the fed chicago president say potentially we see inflation fall to 1.5%. that could be a reason to cut. we saw the core deflator come out earlier this week at 1.6%. many investors will be having their eyes peeled to see any commentary on what inflation means for the next move. david: bloomberg's marty schenker and sarah ponczek, thank you for being with us. you can find all the charts we used and more on your terminal . go -- at g tv coming up, u.s. trade negotiations arrive in beijing. what's at stake for the global economy? this is bloomberg. ♪
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♪ lisa: this is "bloomberg daybreak." tesla reportedly will slash prices in a bid to regain status as a top rooftop solar panel company in the united states. according to "the new york times" today, tesla will announce -- [no audio] shows tesla hasn't surpassed its solar business.
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airbus profit jumped almost 40 fold. bp boosted cash flow and hit the target on profit estimates the first quarter. rising oil and gas production offset the impact of lower prices. the british energy company says strong prating performance boosted results. that is your business flash update. david: thanks so much. china has taken a range of actions to reinvigorate its economy. as far as stephen schwarzman of blackstone is concerned, they are working. stephen: china's economy looks pretty solid now, 6% growth. i think that would have surprised some other people. it didn't particularly surprise me. they have the ability and china to really force money into their system to create growth, and they are doing it, and it's been successful. eavid: we welcome now candic
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bangsund, vice president of global asset allocation at fera fiera capital. china pmi's came in overnight. it is not quite at 50, but approaching it. narrative of the transformation in china is still intact. you can see that in the numbers still above the 50 threshold. while they were a little bit weaker than expected, they are still consistent with stabilization for china. lisa: although you have to wonder whether perhaps the expectations have gotten ahead of themselves, with analysts giving a little too much credence to stimulus as the chinese government is engaging. we did see the actual figures missed estimates. you can see that here in this chart. that is one of the big factors here. candice: the numbers are
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inherently volatile. month-to-month, you are seeing a little more movement, but in general our view is that the market is a little too pessimistic on the state of the global economy. david: let's look below the top line for a moment. i've got a chart up here. i will surprise the control room for a moment. the large companies in china, the yellow line, are doing much better than the small and medium. does that give us pause for concern? candice: absolutely. it is a bit more of a cyclical story when the small companies are underperforming. that is just the repercussions from the late 2018 uncertainties in general. lisa: there is also a concern about the financial shenanigans, the accounting shenanigans that are sort of notoriously uncovered in untimely ways in china. there was a story overnight saying that this pharmaceutical
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company in china had a $4.4 billion accounting error, where they miscounted something. to what extent are people pessimistic because they don't feel like they are getting an honest read of what is going on? a bite: i think there's of skepticism regarding the chinese data in general. we like to look more at the underlying economic activity like retail sales, factory production. these indicators give us a little more clarity on the overall health of the chinese economy. these are where we are actually seeing some improvement, and proof that all of that fiscal and monetary stimulus is bearing fruit. david: we had some surprise numbers, maybe to the downside less than expectations in china. in europe, numbers went the other way. europe may be growing a little faster than thought. getting a sense that may be the worst is behind us when it comes to the euro zone. spain and france both exceeded
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expectations, and the euro zone in general looks to be on the path to improvement. that is consistent with some of the survey data we have been seeing as well. unemployment ticks lower. what we heard from the ecb last month was a story of thomistic was aence, or strength -- resilience, oric strength i should say. some of the resurgence we are seeing, which regions do you think will surprise to the upside?as an asset allocator , would it be prudent to put some money in? china.: first of all, that is where the most pessimism was at the end of 2018. any further signs of stabilization there, we are overweight on emerging markets. stronger than expected growth, and accordingly, earnings expectations driving equities higher in the emerging-market space. one.e is another
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we are currently underweight, but i thing this would be an interesting time to look at an upgrade because, from a valuation perspective, there is still opportunity versus the u.s., where a lot of the good news is likely baked in. lisa: thank you so much. withce will be sticking us. meanwhile, a slew of earnings out this morning. abigail doolittle is here with more. abigail: ge shares are popping up. they beat top and bottom line estimates. on the industrial cash flow use, they beat estimates there, burning cash of $1.22 billion. that was also better than last year, $1.6 billion. all of this after ceo larry culp warned this could be a very brutal year for cash burn. 2020 is expected to be a recovery, but that is the story. those shares popping higher.
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also some winners in the health care space. beating,k and pfizer merck beating in a big way. they boosted their full year outlook. pfizer also beating, boosting the strength of their to do with the health care unit. lisa: thank you so much. that is bloomberg's abigail doolittle. coming up, fewer clicks, lower ticks. apple shares dropping in premarket after total paid clicks grow at the slowest rate in years. more of next. this is bloomberg. ♪
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lisa: google slumping in premarket after first quarter results showed slowing ad growth, rising at the slowest pace since 2015. joining us now, bloomberg's paul sweet.
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what is showing here is the lack of transparency from the company. reporter: that was disappointing. revenue growth came in a little slower. they talked of headwinds, and that is ok, but the real question from a lot of people is there's more competition in digital advertising today, particularly from amazon. people want to get a handle on whether that was a material reason why growth slowed. i don't think we really got a great answer. uncertainty still surrounding these earnings. lisa: let's put up a chart who -- the advertiser the advertiser revenue a facebook and google. google still dominant, but the white bar catching up. you just have to think, how much of google's ad revenues are being cannibalized by the other internet giants?
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what are they doing to change that? i don't know. paul: it is interesting. being a think as amazon new advertising competitor, it has always been a duopoly, but now amazon is putting up some big numbers. a lot of their advertising is coming from searches, which is obviously the core business for google. david: which could explain the fact that facebook sales were not down at all. they say it is not competition, we are changing our product. but they wouldn't say what it was they are changing. paul: and what the impact was from those changes. we know they rely a little bit more on pc as a platform for their searches as opposed to mobile. david: but pcs didn't grow hardly at all. paul: that's right. facebook has over 93% of the revenue coming from mobile. that continues to be a great growth story. a bit of a disappointing quarter. it happens occasionally.
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the stock was at an all-time high, so a little bit to give back, but the lack of transparency hurt them a bit. david: candice, what about the sector overall? night, andfore last general the results were ready positive. the sector has been responsible for a lot of the year to date gains in the s&p 500 and nasdaq. from a valuation perspective, we are seeing opportunities from sectors such as industrials, financials, energy, where we do see the potential for earnings revisions, upward revisions in these particular sectors. from a valuation standpoint, it would argue for further upside. lisa: it is interesting to me punished, butng the growth rate is still admirable for any other company. ofstill speaks to this cycle a complete valuation game, not a fundamental growth story.
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candice: absolutely. it is an expectations game, and expectations are pretty lofty. david: the competition is among the big guys. the whole issue has been all of the growth in online advertisers has been among facebook and google. now amazon can come in, so we've really opened it up. paul: folks like snap and twitter are trying to pick up the scraps, and they have found their niches. there seems to be a lot of ad dollars to spend. lisa: what do you think the cfo of alphabet should have done to give confidence that she has a handle on this and is giving transparency to the market? paul: i think people feel confident in her overall, but there was a lack of clarity in communications. people want to learn more about you two. david: i think -- about youtube.
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david: i think the respect she assume.s us paul: they didn't do themselves a paper in last night's call. david: thank you both very much for being with us. coming up, 3m's uphill battle. the stock got multiple downgrades and target price reductions. 3m's ceo, joins us next on what they are doing about it. this is bloomberg. ♪ so with xfinity mobile
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the cac in paris down even though there was better-than-expected data out of the french economy. let's get a sense of what is going on cross asset. what is interesting to me is you are seeing a big steepening in wos-tens yield curve. copper getting a little bit of a lift on the heels of some more optimism out of europe. david: science applied to life. that's how 3m describes its mission. it is a company with 93,000 employees in over 70 countries, working in electronics, consumer product, health care, and much more. we welcome the ceo of 3m uncle roman. we -- of 3m michael roman. we all think we know 3m because of post-its, but it is much more than that. michael: our value model is strong, and it starts with our
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fundamental strength, how we leverage synergies across the enterprise. our technology platform is shared across all of our business. our manufacturing capability is vertically integrated around the world. global reach to our customers. these are the synergies that make the enterprise greater than the sum of our parts. then we prioritize ways to create value. that is innovation and managing your portfolio that drive us forward. david: a lot of companies have synergy. i worked for disney. but you also apply science to it. that is not true of all companies. michael: science is what drives those. science applied to solving our customers' problems. with think about our customers as companies, homes, every life around the world. lisa: 3m has been in the news recently, reporting first-quarter earnings that missed estimates to such a degree that the shares had their biggest tumble in about 30 ears. what went -- about 30 years. what went wrong?
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michael: q1 was a disappointing start to the year. we were impacted by several key markets that we had been talking about even as we exited 2018. we saw soft demand in those end markets. decline accelerated as we went through the quarter. we took actions to adjust for that. we weren't able to compensate for the decline we saw, and just delivered soft growth relative to expectations, and disappointing earnings. david: were you surprised? didn't raise any questions in your mind as ceo? do i have the mechanisms in place to monitor what is going on in real time? michael: we didn't take enough action in the first quarter, and we are taking aggressive actions now. we know how to do this. we know we will lead into challenge like this, and lead out of them as well. our team is on it, and we are taking really aggressive actions
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as we go into the second quarter. lisa: what are some of the aggressive actions? some people are saying the fact that you bought back more than $70 million of shares in first quarter, perhaps that could have been deployed elsewhere. michael: we have a long strategy to share repurchases. we continuously are in the market around that, but our actions are really about getting our operations aligned to continue to execute that value model, but adjusting to the demand softness we saw. the actions are taking down costs, of course, aggressively. then looking at our manufacturing, we are vertically integrated. we can adjust those production plans. we've got to make sure we are managing our cash as we go through slowdowns in key markets. then we announce some restructuring to better align us to where we are in the markets in 2019. david: where was the biggest misalignment?
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is it china, automotive, electronics? where specifically did you see the biggest issue? michael: those are the three biggest end markets. we saw declines accelerate through february into march. the distribution channels you work with also react and take inventory, so it gets multiplied through the quarter. that tends to get back in line. the channels adjust quickly. but as we go into the second quarter, and now becomes a story of what is end market demand going to do in those areas. we are positioning ourselves to be relatively that. lisa: are you changing your supply chains at all? michael: we have grown will -- we have global supply chains. this has served us very well. we have been in markets like china for over 30 years. part of our strategy is being close to customers. we adjust as needed, but we have
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a lot of flexibility in our supply chain to make the kind of changes i'm talking about and be in line with into market demand -- with end market demand. david: how do you make sure you don't undermine your ability to deliver as things come back? michael: that is the big challenge in adjusting to these kind of situations. it is not simple across the board cost-cutting. you have to be focused. you've got to be aggressive because you've got to get in line. we have to deliver. one of our hallmarks is we are able to make these adjustments and be in a position to lead back out. you've got to stay true to that value model and focus on what you know will take you forward, and that is the key for us, making that right balance across the board. lisa: we were just speaking with bangsund of fiera shetal, and she was saying
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thinks people are being too pessimistic on china. achael: china, of course, is very attractive market for us to grow. even as we talk about challenges near term, we have a strong health care business in china, growing double digits in q1. it really is focused on these key end markets in automotive and electronics. these are big market segments for us in china. long term, it is a very attractive place for us. near-term, we have to be aligned to with the current demand is. david: what about the u.s. economy? what are you seeing? michael: the broad macro in the u.s. still looks solid. across our business, we have good areas of growth. are broader health care business is doing well in the u.s.. are consumer business is strong, growing above -- our consumer business is strong, growing above gdp. automotive is a little softer in
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the u.s. businessme areas in that are off to a slow start, but we see improvement for the year. lisa: you talk about electronics and autos as particular weak spots. how long do you expect that to persist? michael: a lot of people see that improving as we get to the second half. we are taking a more cautious view. we are very close to the oem customers, the original equipment manufacturers. we see their demand, and will respond to that. we are hopeful that it will improve as we go through the year. david: how would you innovate for an economy that we may not be able to anticipate? michael: it starts with being close to our customers, and working with them on what they need to solve, and finding those unarticulated needs they have for innovation. david: i want to come back to
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what you're doing right now, and about your balance sheet. some people are questioning your leverage as you borrow money, and you've got a long-term plan on share buybacks. are you concerned at all about your credit rating and whether you will get to a ratio that will undermine your credit rating? michael: we've laid out a five-year plan in our balance sheet. the first priority is organic growth, investing in r&d and capital investments. we have a long history of paying years of, on hundred paying dividends, 61 years of increasing dividends. on flexible capital, we are going to deploy. we like the opportunity with acquisitions to comp limit what we do organically and leverage those synergies -- to complement what we do organically and leverage those synergies. david: thank you for being here. michael roman is, of course, the 3m ceo.
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lisa: coming up, eli lilly chairman and ceo david ricks. stay with us. this is bloomberg. ♪
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viviana: this is "bloomberg daybreak." coming up later on "bloomberg markets," ares capital's co-founder. ♪ david: the pharmaceutical giant eli lilly reported earnings earlier this morning. the stock is now down in premarket trading about 3%. we welcome from indianapolis
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david ricks, eli lilly chairman and ceo. great to have you with us. take the ins and the outs. there's some apples to oranges comparisons here. what happened with your revenue growth? guest: thanks for having me on. it was a busy quarter because on the one hand, i think we are accelerating the growth of our newest products come about at the same time, cialis, an old y, has gone offl patent. underlying growth for the was 5%, 7% on volume, and almost another 5% if we take out cialis. we are pleased with the underlying performance of our new products, which make up almost 40% of the company. we are on track to deliver on our midterm commitments, a 7% compound annual sales growth by
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2020, as well as our operating margin goals. lisa: on price pressures, the idea there has been so much focus on reducing drug prices, you did see some pressures that did not seem to have the pricing power people were expecting. what is the outlook going forward? on price fore -3% the quarter, so with all of the pricing debate, most pharmaceutical companies are giving price in the market. we are doing that for two reasons, one, to expand access for our newest brands. that is a priority for us, to increase the number of lives covered in the u.s. moree also delivering patient assistance programs than ever before, primarily on our insulin. this is where the insurance
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system isn't working for patients. an wean come to lilly, provide very low cost access to our medicines while we wait for the insurance system to kick in. as those products grow, the programs have grown, and in response to the public policy and questions from consumers about affordability of our medicines. we think we are doing the right thing with those, but it does create a headwind in the u.s. on price. david: we talked about organic growth in sales and price. what about margins? guest: we've committed to get to pharmaour business next year. we are on track to do that. we did accelerate some investments into q1, particularly in r&d, as well as in supporting the introduction of some key new brands and in the u.s.
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we launched a consumer program there, as well as ramped up primary care interactions. that is the quarterly impact. for the year, we are feeling solid about our guidance and our ability to get to the 2020 goal of 31% operating margins in the pharma business. i think we are doing that while balancing investing in our long-term future, which we are very excited about. lisa: we now have about 20 candidates for the democratic candidacy going into the 2020 election. ahead of that, given all the talk on reducing pharmaceutical drug prices, how are you positioning? what is the communication you have with washington, d.c. right now? guest: we pay attention to a lot of things going on there. there's still a lot to be sorted in terms of where the candidates come out and what might happen in the future. with the current administration, we are focused on assisting their efforts to influence this rebate pass-through rule in part d.
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it would ask insurance companies the savings they the consumer.o it is safe to say we are still awaiting concrete proposals. we are focused on improving access to health care and advocating for policies that support that, improving the quality of that access because we seen a hollowing out of benefits, particularly for patients with chronic illnesses like diabetes. consumers buy insurance, but they don't get the benefit. all the while, allowing innovation to flourish. if we allow for expansion of health care, we need a way to pay for it. i think the history tells us innovation is the most efficient way to drive productivity and health care. david: thank you so much for being with us today. that is dave ricks, eli lilly chairman and ceo. in the meantime, general electric is over 10% up.
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i am not surprised. when it first crossed this morning, it is not just the earnings-per-share or revenue beat, but the free cash flow. lisa: they are burning through less cash than expected, and they maintain some of their forecasts with larry culp, ceo, is one but most this quarter in but will be a multiyear transformation. resetemains a year for us." david: the question is why did they burn through less cash, and does it tell us anything about power in that company right now? lisa: we will dig into that. coming up, we hear what law street -- what wall street heavyweights are discussing at this year's milken conference. this is bloomberg. ♪
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viviana: this is "bloomberg daybreak." president trump escalating the
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showdown with democrats in congress investigating his finances. he sued deutsche bank and capital one to keep them from complying with congressional subpoenas targeting his bank records. the suit because the subpoenas "harassment." the two biggest banks in the nordic region saw their market value shrink. first-quarter results disappointing investors. bank danke dunk a databank -- danske bank and nokia bank are being hurt. -- feedback on twitter was pretty negative. congresswoman katie porter suggesting chase should try paying its workers more. that is your bluebird business
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flash. does your bloomberg business flash. lisa: this tweet -- your bloomberg business flash. lisa: this tweet took about five minutes before it was deleted by chase. negative is an understatement. they were scathing on twitter. david: don't let marie and when at do your tweeting for you -- don't let marie and when at -- marie antoinette do your tweeting for you. lisa: financial titans may have descended on los angeles for milken, but the conversation quickly turned back to germany. europe.slowdown in citigroup sees an opportunity to drive growth in the middle east. and oaktree eyes china's nonperforming loans. is ourjoining us bloomberg reporter.
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this is what they said at milken. >> deutsche bank has been in the spotlight for the last few years. >> it will be interesting to see how the leadership there figures out how to lever the core strength of that institution. >> it is tough to manage a bank when everyone is looking at it. >> deutsche bank has very strong strengths, particularly in europe and the local markets. david: i think it is fair to say tiptoeing around. [laughter] lisa: perfect way to say it. they are comparing this to davos in switzerland, and obviously all of the heavy hitters are descending on southern california to talk about deutsche bank, but that isn't anything new. obviously the merger talks with commerzbank sellthrough. now the question is, what's next? will deutsche bank be ever to get together it's fifth turnaround plan since 2017 and get things moving again?
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right now that is a huge question. meanwhile, they were not tiptoeing around what is going on with the middle east, particularly after the saudi aramco deal. let's take a listen to what the citigroup vice chair had to say about planes in the middle east. >> that gives us confidence that the activity is there. we expect the continued investment out of the middle geographies, as well as investment in the geography. we look to that as a growth area. area?middle east a growth or saudi aramco as the growth area? ofanh: there may be a bit vying in here. everyone is going to be jockeying for position, so i am very unsurprised to hear some pumping up of deals talk in milken. david: it took real long to get over khashoggi come didn't it?
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across the board, everybody is back in. third story, howard marks was thinking of maybe investing tentatively in china's nonperforming loans. >> there is a big pileup of npl's in china. we are looking at those. the numbers are very vague. everything in china is really big in terms of numbers. we have been moving incautiously. will continue to do so. there is ar has it fair amount of nonperforming loans in china. good idea? ananh: it sounds like it is good idea for him. the interesting thing he said was that china is like an adolescent in terms of its economic growth. europe and japan are like senior citizens. the u.s. is like an adolescent,
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or a mature adult. lisa: he has expressed confidence in the fact that there is a little more of a structure and enforcement mechanism, so you will get paid back if you go into the right loans with the right structure. thed: you can't argue with growth, but can you argue with the rule of law? you need you know you can get your money back out, and that has been the issue with china. have a i will say they vested interest in trying to make sure people can. that was like 25 years ago when they came into the wto. [laughter] lisa: that was incredible. david: how did that work out? it may happen. thanks for the reality check, david. david: that is bloomberg's lan
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nuvenoomberg's lanai -- coming -- that is bloomberg's lahnan nuven. live from new york, this is bloomberg. ♪
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♪ david: breakable china.
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pmi's close to even as trade negotiations resume and basing -- in beijing. is a cut on the table? the fomc meets today. rabbit all up as we hear from apple after the bell today -- the faang's wrap it all up as we hear from apple after the bell today. welcome to "bloomberg daybreak." mcdonald's is out. lisa: a huge beat on the day. this is really the headline here because it is a question of how exactly they generated that increase given all of the hype they had already around the breakfast they introduced, as well as some other initiatives. first quarter earnings-per-share at $1.22.oming in still, the headline is comparable sales, such a pop in
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the shares ahead of the market. first-quarter revenue also beat , $4.96 billion versus the estimate of $4.93 billion. reports oning general motors right now. david: they have a nice beat on earnings-per-share, $1.41 as opposed to $1.10 come about .evenue $34.9 billion in an ipo, andc if you back out to lyft adjustment, they are pretty much right at $1.10. lisa: interesting to see that revaluation of these lyft deal. david: we will be able to talk about that with the cfo of gm later on in this program. lisa: looking forward to that.
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meanwhile, we are also getting some earnings from mastercard. first quarter adjusted earnings-per-share, $1.78, versus the estimate of $1.66. definitely beating expectations in a time of strong consumers of a little bit. we will get more details as they emerge. david: a lot of beats come of it may be momentous as general electric. before we started the program, they beat earnings-per-share and beat on revenue, but the big headline was the free cash flow billion whent $1.2 the consensus estimate was about $3.9 billion. they are up about 9% in the premarket. lisa: a lot of people are seeing this as a proxy for ceo larry culp and his efforts at the company. definitely viewed as a positive. david: which is good because they have a lot of debt to
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service, and everyone is concerned about the leverage issue. lisa: let's get a check of what is happening outside the earnings news. ahead of the u.s. open, markets kind of going nowhere for the nasdaq, even with alphabet shares plunging. crude rising as we see some turmoil out of venezuela with opposition leader juan guaido reportedly calling for some type of upheaval, albeit peaceful. the euro gaining against the dollar out of better-than-expected data out of that region. david: now we will turn to viviana hurtado with first word news. viviana: we begin with high drama this morning in venezuela. opposition leader juan guaido calling for a military uprising. it is in this video you see right over here. it was released about two or three hours ago. he is surrounded by troops at a base in the nation's capital. there he proclaimed the end of president nicolas maduro's
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regime. he is calling on government supporters together at the presidential palace to defend nicolas maduro and calls the soldiers back in guaido soldiers -- itors." guaido "tra president trump suing deutsche one to notpital disclose financial records to congressional investigations, calling them "harassment." there is growing concern about stephen moore's past comments on women and midwestern cities. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm the vr art auto. this is blimp -- i'm viviana
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hurtado. this is bloomberg. david: we had herman cain, who was not a nominee because republican senators said no thanks. something like that may be happening with stephen moore, but it doesn't have to do with the credentials. lisa: it has to do with comments he made about women and women's sports. we should say stephen moore was speaking on cnbc earlier and said he expects to serve on the federal reserve, so it is not -- so it does not appear he is stepping down or withdrawing his name the way herman cain eventually did. david: at the same time, if there is a snowball effect with republican senators, it will be very hard to go forward with the nomination as a practical matter. in the meantime, let's talk about the federal reserve. confab is in full swing in beverly hills. >> the fed is the guardian of the system. they are not the enemy of the
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system. >> i think the chairman is doing a very good job. i think it is a difficult job. but if you translate forward, it doesn't look like there's going to be a lot of policy activity through the rest of the year into 2020. >> the fed is in a good place. valuations are high, but people need to invest. it is all about looking for opportunities. look like they are coming up at the current time. >> if we have a lot of wage inflation or something else, we've seen somewhat unlikely, and they start increasing interest rates, most probably it is because it is a smart thing to do. joining us here in new york is jason pride, and in london, gene tan nuzzo. thank you both for joining us.
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we are looking at the median rate, and the second line is the real rate. let's start, jason, with you. what does this say about the fed? couple ofre's a estimates of neutral out there. what we've seen is when the fed has overshot any of these estimates of neutral by a significant margin, you end up getting an economic recession. this time around it seems like they are stopping right at the line by almost all of the measures. the one time in history they have done that was the 1994 midcycle slowdown that we saw. they actually stopped it right at that point. the even pulled rates back within the next year, year and a half. that actually extended the cycle. it feels like this is another one of those times when they got it right.
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they heard investors and pulled themselves back. lisa: this is something i hear a lot, that basically the market and many people are thinking the fed is really going to land this thing. comment on this. i want to get your opinion as you see the market bake in the likelihood of a rate cut this year. is the market getting ahead of itself, or saying federal reserve got it right this time and making the appropriate move to keep the market going? gene: the bottom line is the market has it just about right. the fed is communicating they are essentially at the end of the cycle. they don't see any more hikes this year. if you look at the degree to which they have tightened policy, you have to look at more than what that chart shows. they didn't stop easing when interest rates hit zero. the tightening probably started when they started tapering in 2013. it is a longer and greater
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magnitude then we seem really in any other cycle, and those conditions tightening is what we started to see in the first quarter. i think what the market is saying is not that we expect the fed to cut 25 or 50 basis points in the next year. what they are saying is maybe there's a 20% chance of a real cutting cycle, which is usually what we have after the fed pauses, with some exceptions. if we do have a cutting cycle, that will take the fed funds closer to zero. i think that probability is pretty consistent from what you see from other probability models at this point. david: one more chart. the yellow line is the 2% goal. it is going the other direction, down around 1.5%. do they care? is there anything they could do about it?\ butn: i think they do care, i also think they look at this number and think it is kind of nebulous. they feel like they don't have to hit the target right on the
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dot. i don't fully agree with the other perspective here, that they are going to be bringing on a full range of cuts. this could be the market kind of extrapolating something that is not necessarily going to transpire. we start seeing growth surge up , earningsit this year surge up, that pressure is going to be taken off the table. i would think we are going to be sitting more flat with interest rates, standing still and holding for a period of time. the past cycle they actually did come in and cut, i don't think the weakness we are seeing in the economy has been very long-term stretched. talk about an earnings recession, we are talking about break even in terms of earnings growth. it is not really that bad. david: so you think the market -- lisa: so using the market has it wrong when it comes to fed rate cuts. jason: i think there are other
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factors in there. there is a term premium built into the fed rate target. lisa: so perhaps we are interpreting the market wrong. tannuzzo,de and gene both of you are staying with us. coming up, the latest died at shows we getting chinese manufacturing as trade negotiators arrive in beijing. what is at stake for the global economy? more next. this is bloomberg. ♪
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electricgeneral burning less cash than expected in the first quarter.
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that gives a boost to ceo larry culp's plan to rejuvenate the struggling manufacturer. he expects a significant rebound next year for industrial cash ge's considered a gauge of branding potential. pfizer boosted prices for several key treatments, temporarily halting price increases last year after president trump pressured the drug industry. mcdonald's first quarter also beating estimates. the fast food chain got a boost from delivery in its home market, plus breakfast items came that -- breakfast items kept diners coming in outside lunch hours. david: thanks so much. china has taken a range of actions to invigorate its economy, and as far as >> down's -- and as far as blackstone's stephen schwarzman is concerned, it is working.
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>> it didn't particularly surprise me. they have the ability and china to really force -- ability in china to really force money into their system to create growth. they are doing it, and it has been successful. david: still with us are jason nn -- and gene tam tannuzzo. we got pmi numbers overnight, just a hair over 50. his stimulus not having the effect we hoped? when we look at pmi numbers, 45 and below is problem territory. 45 to 50 is not great. 50 and above is healthy overall. when you are seeing 50 and above on these surveys, that is ok. when you get down below, you get
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to more difficult areas. the second thing is this is one of the only independent data series out there, which is great. we all talk about how we are worried about not being able to dissect or believe the chinese data. this is more driven by them. thing onrop here, one china's ability to simulate, they are an interesting standpoint where they have so at the same time the federal government has such a strong net cash position they can plug that hole whenever they want. what we are betting on is whether they will do it ahead of time proactively. lisa: gene, are you plowing into china right now as well? : we are definitely not.
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we don't trust the organic chinese data. we look at industrial production they do in japan, trade data in australia and korea, and we still see a lot of weakness that is going to force some of these central banks to ease. i will say the area we are most concerned about is the banking system in china. if that is something the central government is able to recapitalize, that would give us a greater degree of comfort in that region. david: does it have anything to do with trade? gene: i think it does, and that trade weakness you can see weighing on trade relationships other than just the u.s. and china. european auto sales and the weakness selling into china. i think we saw some glimmers of hope in demand there, that would be something to be excited about. i think if we got the substance of a real agreement, which is probably not going to come in
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the next couple of weeks, that could be something we really rewrite the script. jason: a lot of people don't realize how less important today today tradeportant is for china when their economy is only about 6% driven from exports. of what used 1/3 to be five to 10 years ago. ony have done a good job their economy, and the trade is regional with countries right in that region rather than the u.s. and europe. those are still big parts, but a lot of the trade is done within the asia region. david: like korean won and the aussie. lisa: that's what you've been getting some of the negative earnings out of south korea. buzz if you are sticking with us. meanwhile, we are getting some
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earnings. david: health care america has a nice beat here. $2.97, aser-share of opposed to $2.32 estimate. you can see they are up about 2.4% in the premarket. lisa: reaffirming their full revenue forecast between a range to $51.5billion billion. i am always interested in hca because they are one of the biggest high-yield bond issuers out there. the question is, going forward, how much they can increase revenues. david: i didn't know they are really highly leveraged. lisa: a lot of the for-profit hospital chains are pretty leveraged. coming up, apple has rallied
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this year, adding almost $300 billion of market value. wall street is getting skeptical of those gains. more on that next in today's bottom line. this is bloomberg. ♪
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lisa: it is time now for the bottom line. apple reports results after the bell today. , daelcome tom forte davidson senior research analyst. he has a buy rating for apple. thank you for being here. i'm just wondering, especially given all the discussion about own in the smartphone super cycle, what are you looking for for a positive beat? tom: it really change the investor focus, so people started focusing more on what will be next for apple.
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what is the company going to do to ease its dependence on the smartphone? you saw that with their product announcements where they talked about apple tv plus, a credit card with goldman sachs, opportunities and health care. given there is less investor , i thinkthe smartphone it is a very good quarter for apple. lisa: can you really separate -- david: can you really separate the platform from the services? can you separate it from the fact that you have an iphone or watch? tom: to the extent you have an apple device collectively, they have a large installed user base and are able to sell premium news or music or video content, that is the big opportunity. you've definitely seen maturation in premium smartphones, so now it is about getting the consumers to spend money on things other than devices.
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lisa: when you talk about the content aspect, people have been seeing perhaps they are going to thing about buying netflix, or how are they going to compete with netflix. do you expect some kind of detail there today? tom: arguably they missed the opportunity to buy netflix come about when they had their product announcements, -- to buy netflix, and they had their product announcements, they had apple tv plus, but did not tell us how much the subscription will be. i think they are likely trying to determine how much content they will have at launch this fall. you've got not just netflix, but amazon, disney, some really big players who have a lot of experience and success in that area. why can apple compete in that sphere? arguably, blackberry was
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out, so there was a different smartphone than apple. lisa: but completely different. tom: think of the macintosh for ipod.ers, the where they can create an opportunity, they are dominant. david: blackberry did not have an "avengers" movie. tom: they certainly did not. david: can they really compete with the likes of disney, now with fox, as well as netflix and amazon? tom: it is certainly a crowded playing field, but i would argue apple definitely has the wallet to invest in content, and they have the talent. lisa: what about china revenues? we have seen a slowdown in growth, particularly with smartphones.
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tom: the big story in the december quarter was the weakness in iphones and china. for the march quarter, we are not looking for a significant rebound in smartphones or sales in china. david: tom forte, thank you for being with us today. coming up, health care reports. we take a look at the beats, the misses, and what companies are saying about the first quarter. live from new york, this is bloomberg. ♪
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lisa: this is "bloomberg daybreak." i am lisa abramowicz. let's get a check of what is going on ahead of the market open.
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s&p futures nowhere. ftse down a touch. the cac 40 down a touch even though you did get better than expected economic data out of france. classes, theset key to 10 yield curve is getting a boost to financials. , yields indipping germany rising on the heels of the better-than-expected data and copper getting a bid as we have a firmer global growth picture. david: a slew of health care companies reported earnings with pfizer, merck, and others delivering first-quarter results. they are all up with the exception of eli lewis. joining us is bloomberg health care reporter. it is maybe a coincidence but they all seem to have beat on earnings-per-share except eli lilly. this is an interesting quarter, a turning point in the pharma story in that the
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pressure from the u.s. government has reached an all-time high. a lot of companies are pulling back on their price increases and pfizer which increase the price of 41 lacks -- last year continues to reap the benefits of that. the companies that pullback more are suffering more and they will have other growth drivers and pull other levers to show growth. lisa: we did speak with the eli lilly ceo who had this to say on why they did see a decline in pricing. >> we are -3% on price for the quarter and so you are right in a with all the pricing debate, most pharmaceutical companies are giving price in the market. lisa: the question is eli lilly saw that but the other companies less so. is this a pressure that will accelerate over time? cynthia: it is. lily is big in diabetes.
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insulin prices have become a touch point in this argument about drugs that people need to keep mentioning their disease and insulin has risen in prices but that is a competitive market and an area where there is a cute pressure. lily is confronting some of those issues and that might set them apart from other drugmakers. david: one of the things he talked about was bbm's and rebates and going back on that. if that were to happen, if you wait to magic wand and all of those rebates went away, what would it do to those stocks? johnson & johnson and eli lilly said they would like if they went away. cynthia: they would. drugmakers say they would like them to go away but they want to preserve margins. becomes how much of the rebate structure help them maintain their market share.
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they see the rebates in exchange for exclusivity agreements. they do not compete on an equal playing field. david: it is not clear what people are paying. lisa: heading into the 2020 election, the pressure one link about. news,a koons of bloomberg thank you for being with us. meon, it is interesting to to see the health-care sector in general get a boost after being so beat not. this is an area of opportunity? jason: it is an interesting area of opportunity. it is one of the bright spots where we have a midcycle earnings slowdown. whether you call it in earnings recession or not, we will see. this is one of the areas that has earnings momentum going it is interesting to see it does provide some opportunities. the valuations are reasonable. the downside is you do not know where the balance is between the
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government and these companies on pricing and how that will shake out over time. i think this is an open question mark. jason makes an important point about the government. we have a chart that happens to go back to when donald trump was elected president and it takes the health care stocks. the white and yellow lines along the bottom are biotech's and pharmaceuticals. the purple line is insurers. how much is pure politics? gene: i think a lot of it is and will continue to be. administration has its criticisms of health care and the pharmaceutical industry and we will see this playing to the campaigns as we going to 2020 for the elections as we start to see the progress of janet's push for health care for everyone. if you look at the near-term -- the progressive candidates push for health care for everyone. near-term, at the
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lot of these companies are places we can feel comfortable investing on the bottom side in the short term. capitalsaid, a lot have structures. in the long term, that political pressure will grow and it will become a less attractive place. lisa: you talked about the capital structure and we did see results that did be expectation, shares up 4% ahead of the u.s. open. has one of the -- is this the time to start buying those bonds or is it a time to solidify profits given the fact that things could change with policy changes gene:? policy -- policy changes? gene: policy is the key variable. we are concerned with a high-yield bond market. outside of the acute political risk, the sector is less cyclical and you can feel better
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about that side instead of buying a cyclical industrial company. that is for the here and now. over the years those pressures start to become more serious for the health care industry. now you can feel comfortable in that space. lisa: jason pride of glenmede tannuzzo, thank you for much. david: we've been talking about ge. they had a nice beat on cash flow. they have just begun the call with the ge ceo talking that the restriction is second half loaded. lisa: although this is interesting. larry called saying the 737 max new risk and was not included in prior guidance. it is interesting to see whether or not he will cloud the outlook that has been positive based on the issue with that boeing jet involved in fatal crashes and continues to have bad news
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coming. david: they were being careful with their guidance since before overalled -- mr. kulp took and the second half restructuring, i do not know how much is selling part of their health care unit. that is expected to close in the fourth quarter. sharesmportant to note are dipping, they were up as much as 10% ahead of the u.s. open and now they are coming up their highs as they talk about the potential second-half frontloading with the restructuring of the 737 max 8. isthe same time larry culp from the school of underpromise and overdeliver. as a gauge of the u.s. economy. our exclusive interview with the ceo in today's edition of the
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real economy series. live from new york, this is bloomberg. >> we have very good areas of growth for us. our broader health care business is doing well. our consumer business is strong, going above gdp. ♪
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viviana: this is "bloomberg daybreak." coming up on bloomberg markets, ken griffin, citadel founder and ceo. david: time for follow the lead, a deep dive into stories making headlines and moving markets with key insights from industry veterans and insiders.
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how theaking a look at us economy is doing by talking to see euros companies that need to navigate through it. today we are looking at the real economy with the ceo of ceo -- of 3 p.m. -- of 3m. i spoke with to ceo michael roman on his outlook and his take of the company's growth. michael: we have very good areas of growth for us. the broader health care company is doing well. consumer business strong, growing above gdp. we have pockets of softness in the u.s.. automotive softer in the u.s.. businessme areas in that are off to a slow start but we expect those to improve. lisa: you talk about electronics and autos as particular weak spots. how long do you expect that weakness to persist? michael: there are a lot of people that see at improving as we get to the second half. we are taking a more cautious view.
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we are very close to the customers, the original equipment manufacturers, the makes and models. we are close to them and see their demand and will respond to that. we are hopeful it will improve. you emphasize innovation a lot. how do you innovate for economy evolving in directions we may not be able to anticipate? michael: it starts with being closed our customers and working with them and what they are trying to solve. finding those unarticulated needs they have for new innovation, that is where it starts. david: i want to come back to a question on your balance sheet. there are some questioning your leverage as you borrow money. you say you have a long-term plan on share buybacks. are you concerned about your credit rating and whether you get to a ratio that will undermine your credit rating? michael: we have outlined a five-year plan. the first priority is organic
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growth, investing in r&d and capital investments to drive organic growth. we have had a long history of paying dividends. 61 years of increasing dividends. that continues to be a hallmark for us. the flexible b will to employ. we like the opportunity with acquisitions to complement what we do organically and leverage those synergies and we will continue to use share repurchases as part of that allocation. lisa: that was michael roman, 3m ceo. for a look at how 3m's performance is matching up, we turn to a bloomberg international policy correspondent, michael mckee. michael: 3m is seen as a bellwether for the u.s. and global economy because they mix so many things that go into things. they make a lot of products that going to automobiles. global auto sales have been declining. so have 3m's revenues.
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they are tied to that industry. another thing they are tied to is china, as is much of the world. as china gdp slows, that is the pmi we saw decline last night, you can see the revenue goes down as well. finally, the question everybody is asking is our manufacturers going to be able to live with loaded inventories. we ran this chart yesterday talking about snap-on. the same story with 3m. business inventories are rising and so are 3m's. working off the stockpiles you have, you're not making new stuff. that is the question for growth in manufacturing going forward. lisa: joining us is brooke sutherland, bloomberg opinion columnist. talking on what michael was just discussing, how much is 3m representative of the broader industrial story and how much is it idiosyncratic with particular points of pain. that is what investors
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are trying to figure out. it spooked the market when you had 3m come out with such disappointing organic growth numbers. the question for me is these trends are not new. they did not cut costs fast enough to keep up with the slackening of demand. that does not make a lot of sense because these are not challenges that rose out of the blue. i do think their execution issues, automation issues that are idiosyncratic. david: and they monitor it adequately? i asked him if he was surprised and that raises questions, can they monitor going forward to know what the demand is? brooke: this is the fifth guidance cut for 3m in a year. it is natural short cycle business, but that is really disappointing, especially not what you want to see under a new ceo. they have to get a handle on their guidance and being able to more conservatively forecast it. lisa: one thing we were talking about with 3m's ceo is that
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technology and the auto sector have been struggling the most with respect to china. he said he is less optimistic than some people are there will be recovery. where are we in that cycle? it looks like china has put a floor under its problems. we did see a decline in the manufacturing pmi, although it is still in the 50 range. the question is do they need to do more. the chinese suggested today they are willing to do what it takes to keep growth moving up. the trade wars are also contributing to companies like 3m's problems because how much more money you put into china if you do not know what your supply chain situation is going to be. brooke, automotive's soft in china. we'll hear from gm about their issues in china. there are electronics.
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a lot of it is buying and putting in electronic notification at the plants, is automation and plants. will china be investing in that? brooke: i think so. that is where the industrial world is moving is more complicated technology and manufacturing. in the case of 3m they do a lot with consumer electronics. screen components that go on your smart phone and laptop and things like that. we have seen a slackening of demand because you do not need that many smartphones. cycle.placement we are also seeing that with apple. david: brooke sutherland and bloombergs michael mckee, thank you for being with us. surging. are abigail doolittle is monitoring the analyst call. isgial: ceo larry culp realistic. he talked about industrial cash flow being better than expected
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but he said it was timing. this is still reset year. the restructuring is backloaded the second half of the year. guidance for industrial cash flow remains the same. they are expecting 2020 and 2021 to be better. they go offense on aviation and larry culp saying this is a game of inches. they still have a long way to go but right now we have those shares surging on the industrial cash flow. david: thanks so much to abigail doolittle. coming up, gma shares taking a hit. the ceo will be with us on the company's revenue mess. that is next. this is bloomberg. ♪
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david: general motors is falling after a slight miss on revenue as vehicle sales declined. we welcome from their headquarters dhivya suryadevara, gm cfo.
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thank you for being with us. you beat nicely on earnings per share. some of that was the lyft investment. how much was lyft? eps,a: we had $1.41 in which was very much in line with our plan. that did include $.31 from lyft. if you strip that out, $1.10 and eps was in line with our expectations and a solid results for the quarter and says is up for the rest of the year as we continue to expect to meet our guidance. david: revenue came in a little bit light, $34.9 million. how much of that is soft because of the of role auto market in the united states and china? dhivya: i would say our revenues were very much in line with our expectations. we went in with the normal level of q1 seasonality. we tooks also down time in our full-sized suv plants as we prepare for the changeover of
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our next generation of full-size suvs. when you factor that in, and we have communicated this to the investor community before, i would say our results were in line. david: last november you announced a fundamental restructuring with closing some plants and the cost structure. how much of what we saw in this quarter reflects savings from that restructuring? dhivya: we are on track to raise seem to $.25 billion in savings, by the to 4.5 billion end of 2020. this quarter we generated a savings of $400 million as we are on track to receive the 2.25 ilion dollars. -- $2.25 billion. you see the results ramp-up in q2 and q4 as you see the results manifesting from the end of q1. david: let's talk about north
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american sales. a lot of that is product mix. where are you in trucks and cadillac suvs? dhivya: we are in the full launch mode from a light-duty perspective for full-size trucks and we started out with our broup cap -- our crew ca variant and it was a specific plan to maximize profitability. sales are up 20% year-over-year in that segment. gmcave grown share with our sierra vehicles as well. up more than 4% in the high transaction price segment. the tractor is doing -- the trucks are doing well, but it is important to note earlier in the launch and as we rolled through q2, you will see the other cap variance and we will roll out our double cap said regular caps, our diesel and ultimately our heavy duty pickup trucks. we are bullish on our truck
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franchise and we are set up well for the launch we have coming up. from a cadillac suv perspective, our xp for launch has gone exceptionally well. we have grown retail share and it is the leading vehicle in its own segment. ofve a strong launch cadence cadillac coming up with our xp6 six launch and our full-sized suv. doing exceptionally well and positioned as well as we going to our launch cycle. david: china is terribly important to gm. there is softness in the overall market, there is softness reflected in this quarter. how do you see the chinese car market developing, specifically for general motors for the rest of the year? dhivya: there has been a lot of volatility. while we are seeing some green shoots in the overall economy, depending on which data point you look at, what we are yet to see is have that translate into
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auto demand. there is talk of -- there is lack of specificity on what that means and what are they going to be. we are watching closely. what we are focused on is the factors that we can control. we have 20 new launches coming up later this year and these are important launches in the key segments in china. we are optimistic about that. this is a team that has navigated head winds by having an intense focus on cost and cost control is in the dna of the chinese team and as a market they are taking additional steps from a cost standpoint. the economy, we are watching ,losely, there is volatility but we are controlling the factors we can control. david: thank you so much for joining us today.
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dhivya suryadevara, gm cfo. lisa: warren buffett's berkshire hathaway has committed $10 billion state and occidental. it is committing an investment to finance the anadarko deal. the bidding war heating up. saying chevron, we will check you out. anadarko gaining premarket as the expectation of a higher bid picks up. david: that does it for bloomberg daybreak. coming up on bloomberg -- the open, twitter global vice president of content partnerships. live from new york, this is bloomberg. ♪
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jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪
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jonathan: american officials touching down in beijing, stuck in the final stretch of talks. economic data in china stuck in a soft patch. the economic sector expanding at a slower pace. it is left to europe to provide stronger surprise. the eurozone delivering an unexpected growth spurt. 30 minutes from the start of trading. here is your tuesday price action. futures down .1% on the s&p 500. dollar weakness and euro strength. euro, 1.1220. treasury yields creeping higher to 2.54 on the u.s. tenure. we begin with the big issue. investors remaining confident in a chinese rebound. >> we remain confident on china. >> there are green shoots. >> green shoots will remain. >> china will continue to stimulate. >>

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